Having read the above, you have probably been left with the impression that you will be presented with a detailed account of a legal chimera which, albeit quite warped, has sprung into reality.
You are, however, gravely mistaken.
What you might expect, however, is but a brief preview of the horrible after- taste that the Legal Aid, Sentencing and Punishment of Offenders Act (‘the Act’) will leave in your mouth.
A spawn of the ‘Jackson Report’, the Act seeks to redress the current economic reality whilst addressing some unreal legal issues.
Prior to discussing the Act, it is of prime importance to look at the ‘No Win, No Fee’ arrangements and how they work.
Put simply, should the claimant win, he will recover 100% of his compensation whilst the law firm acting for him will recover its costs from the defendant.
Furthermore, the claimant’s law firm is then awarded a ‘success fee’ (‘the Success Fee’) for taking the risk of taking on a claim on a No Win, No Fee basis. With RTAs, for instance, that’s fixed at 12.5% of the compensation.
On the other hand, should the claimant lose, he will not have to pay anything; the costs of the firm acting for him will be written off and those of the opposing firm will be covered by an insurance policy, known as After The Event Insurance (‘the ATE’) which is set up and paid for by the claimant’s law firm.
Should the claimant win, his law firm can recover both the Success Fee and the ATE premium from the losing party.
On the other hand, should he lose, his law firm is not awarded a Success Fee and must also pay the ATE premium.
Under Part Two of the Act, however, the ATE premium will no longer be recoverable from the losing party. Furthermore, the Act stipulates that the Success Fee will only be recoverable in certain claims. What those are, however, remains a mystery to the legal profession.
Let us then assess the effect of such a change to a clinical negligence claim.
Let us say that we are representing a seventy- year old woman who has undergone several unsuccessful (or, rather, negligently performed) hip replacement operations.
This has, undoubtedly, caused her tremendous pain and inconvenience. The claim is taken on as a ‘No Win, No Fee’ arrangement, under the Act.
The success fee is set at 50%.
The ATE premium payable is in the region of £ 10, 000 to £ 15, 000 as such a claim is most likely to be settled at Stage Three (Trial).
The claimant succeeds in securing a settlement of £ 80,000. The client’s law firm is then to recover £ 50, 000- £ 55, 000 (the Success Fee and the ATE premium).
Since those will no longer be recoverable from the losing party, the sum will have to be subtracted from the client’s compensation.
Thus, the compensation obtained by the old lady will be slashed to about £ 25,000- £ 30,000.
Many discussions on the subject have arisen since the emergence of the Jackson
This blog, however, does not aim to become a forum for such discussions.
Its purpose is to merely demonstrate that the Act, in its current state, will have a devastating effect on the claimant by slashing his compensation in half.
Regardless of whether the fault lies with the ‘fat- cat’- lawyers or the ‘greedy’ insurers, the injured and innocent party must not be the one to suffer an injustice.
Innovative ideas and possible solutions have often been brought up by practitioners in the social media.
Until, however, those apparitions materialize in actions rather than words, the Act will remain an insult to the English legal system.
Justice may have always been blind but she has never been unreasonable.
Like Baroness Hale has rightfully put it:
‘…although the Court system must be a last resort, it must be one that everyone can afford.’
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